Irregularity in transactions: Not cancelling Axis Bank licence, RBI clarifies

Axis Bank, which says it has suspended 24 employees so far over alleged wrongdoing, has appointed KPMG to conduct a forensic audit. Senior bank officials were also conducting a parallel probe, it said last week.

The Reserve Bank of India on Monday denied a media report that authorities were preparing to cancel the licence of Axis Bank Ltd over irregularities in transactions relating to the exchange of high-value bank notes.

Axis Bank, which says it has suspended 24 employees so far over alleged wrongdoing, has appointed KPMG to conduct a forensic audit. Senior bank officials were also conducting a parallel probe, it said last week. (PTI)

“The clarification comes in the background of rumours in a segment of the media that the bank was likely to lose its banking licence,” the RBI said in a statement.

Prime Minister Narendra Modi announced last month that 500-rupee and 1,000-rupee bank notes worth a total of Rs 15.44 trillion ($229 billion) were to be scrapped in a bid to crack down on the shadow or black economy and prevent counterfeiting.

People have scrambled to exchange and deposit the old bank notes since then, leading to long queues at banks. Tax officials and law enforcement agencies have unearthed malpractice and breach of rules in some cases.

Axis Bank, the country’s third-biggest private sector lender by assets, earlier on Monday dismissed a report in local Hindi newspaper “Dopahar” that suggested the bank could lose its licence over alleged money laundering activities, calling it “false and malafide”.

Axis Bank, which says it has suspended 24 employees so far over alleged wrongdoing, has appointed KPMG to conduct a forensic audit. Senior bank officials were also conducting a parallel probe, it said last week.

Shares in Axis closed 2.5% lower at Rs 445.10 a share in a Mumbai market that fell 1.1 %.